Keeping the Covenant: No Big Tax Hikes
Written by admin on May 7th, 2008
MAY 6, 2008
Every day, when Manchester’s taxpayers are driving to work, they are paying higher prices at the gas pump as gasoline approaches $4/per gallon. When they get to work, they are working long and hard to earn every dollar they can for their families and putting aside worries about their employer moving or reducing jobs. When Manchester taxpayers reach the end of the work day, on the way home they stop at the grocery store where they are paying higher prices for food and other goods.
We gather here tonight to discuss whether Manchester Taxpayers desire the additional burden of even higher property taxes. I, and my colleagues in the Republican Majority, believe that they do not.
The Republican Majority Budget enacted tonight preserves the current level of Town services while controlling the growth of spending and taxes. In the course of our work these last six weeks, we were able to identify savings in several areas of the budget. The end product is a modest, fiscally responsible budget. It reflects the economic times that we are in. This is a taxpayer’s budget.
Manchester’s tax levy will increase by slightly less than 3% which is 2.1 percentage points less than the proposed tax levy in the General Manager’s recommended budget. Under the Republican Majority Budget, virtually every Town department is receiving a budgetary increase that is in line with the cost of living. Including debt service, expenditures in the General Fund will increase $5,765,597 or 3.8% over the current fiscal year’s expenditures. Excluding debt service, the General Fund will increase by $3,510,436 or 2.3% over the current fiscal year’s expenditures. This budget delivers on our promises to control property taxes and is responsive to the calls for fiscal restraint that we heard at the public hearing on the budget a month ago.
We had to make some difficult decisions. These decisions were made against a backdrop of a national economic downturn, skyrocketing gas prices, increasing foreclosures, job losses and a declining housing market. Last week, there was an article in the Hartford Courant that stated that the Town of Manchester currently has a nine month inventory of unsold houses. The Town of Manchester is holding a forum on May 14th on foreclosure prevention where homeowners can learn about programs and options available to help save their homes from foreclosure. We are holding this forum for a reason – foreclosures and loan delinquencies are up in Manchester and across the State of Connecticut. Last week I attended the annual meeting of the Greater Manchester Chamber of Commerce where the Chamber’s President stated in her address that “we have seen many of your member businesses become increasingly concerned about their bottom lines and worried that the intersection of rising costs and shrinking profits was too close for comfort.” We took these facts to heart and concluded that a large property tax increase would only exacerbate the situation.
The federal government is currently in the process of issuing checks of up to $600 for each taxpayer to help stimulate the struggling economy. I do not want Manchester taxpayers to have to spend their federal stimulus checks on increasing local property taxes.
Despite the challenges that we face, Manchester is a strong community and we will weather the economic downturn and emerge stronger than ever. Our greatest asset is the tremendous character of our citizens and the unwavering community spirit that has led us through far more difficult times. Our best days are still to come and I am very optimistic about what the future holds for this community.
For the first time in my memory, the legislature will adjourn this week with a state budget that actually provides less municipal aid than we were expecting. In the past, we have usually been able to rely on hundreds of thousands of dollars more in municipal aid than our initial estimates. To further complicate matters, the Town’s taxable grand list grew in the past year at a rate of just 0.63%, one of the slowest growth levels in the last decade. Finally, decreased recording fees collected by the Town Clerk, less revenue from building permits and decreased interest earned on Town savings accounts combined to reduce the Town’s revenues by over $800,000. These declining revenues are directly attributable to the housing slump.
Another significant factor in our budget deliberations was the fact that we are going into the second year of a three year phase-in of the 2006 property revaluation which was unwisely delayed by a prior Board. This means that many homeowners will see their taxes increase by significantly more that the 3% tax levy increase adopted tonight. The Republican Majority collectively felt that a 6% tax levy increase when combined with the effects of the revaluation phase-in would simply be too much of an increase for Manchester taxpayers.
The Majority Budget will fully fund Manchester’s debt service obligations which have increased $2,255,161 or 33.1%. This dramatic increase in debt service is attributable to bond payments associated with education projects including the addition and renovation of Manchester High School and the renovation of the Bennett Sixth Grade Academy. This debt service is the culmination of many years of bonding decisions that the voters of this community made.
Funding for the Board of Education increased by 3% or over $2,743,000. This allocation will fully fund what the Board of Education describes as its “level services” budget plus it provides an additional $400,000 that can be used for other purposes such as the reopening the Bennett Sixth Grade Academy. By their own calculations, this budget will enable the Board of Education to perform every function and service that it currently provides. At over $95.3 million, the Board of Education budget is by far the largest budget of any municipal function or service that we provide. It dwarfs all of the other Town Department Budgets combined. To put the Board of Education budget adopted tonight in its proper perspective, the sum that the Majority allocated for public education tonight represents a full 98% of the budget request made by the Board of Education who sought a 5.2% increase over the current year’s allocation. The sum that the Majority allocated for public education tonight further represents 99.2% of the General Manager’s recommended budget for the Board of Education.
For those who have criticized level of education funding that this budget contains, I would make the observation that excluding debt service, 75% of the all new spending in the Majority Budget is dedicated to education purposes. When you further consider the fact that much of the increased bonded indebtedness is school construction related, the education related spending jumps into the high 80s as a percent of new spending. The Majority Budget maintains a strong commitment to public education.
The Public Works Department will be receiving a budget increase of 2.9% or $357,327 which will include the funding of a “quality of life” officer to enforce the Town’s property maintenance code. The Public Works Department will continue its road resurfacing, sidewalk replacement programs and maintain our Town’s buildings and properties.
The Public Safety budget will increase by 2.1% or $347,114 and will include funding for increased police overtime and a part-time evidence technician. Major goals for the Police Department in the coming year include recruiting new officers to fill vacant positions in patrol and continuing the planning and training associated with operating a Regional Emergency Operations Center.
The Human Services budget will increase by 3.1% or $97,956 and will fully fund the General Manager’s recommended budget for community agencies. In the coming year, the Human Services Department will play an instrumental role in bringing about a permanent solution to the space needs for youth services programming. The Majority adopts the General Manager’s recommended budget for the Library and Recreation Departments which represents a 4.2% or $214,677 increase over current expenditures. Through an additional $40,000 allocation to contingency, the Republican Majority will further enhance the funding already in the budget for the East Side Recreation Center.
The Majority Budget includes $30,000 for the funding of a small business advocate, an initiative identified during the Town’s first Economic Summit as essential to helping small business owners navigate the regulatory process. The budget also includes $25,000 for the Capital Workforce Partners Low Income (LIFE) program which gives low wage earners the opportunity to get training and education necessary to move up the economic ladder. The Republican Majority Budget also keeps the commitment to expand the use of green energy by fully funding Manchester’s participation in the 20/10 Clean Energy Program.
We were able to fund some capital improvements in the General Manager’s recommended budget through use of unallocated reserves that will not affect our Undesignated and Unreserved Fund Balance of nearly $9.5 million. Pool and court repairs for the Recreation Department in the amount of $84,000 and Public Works heavy equipment purchases in the amount of $40,000 were both removed from the General Fund budget, but will be funded with Capital Improvement Unallocated Reserve. This reserve account is not considered part of the Town’s fund balance and has a current balance of over $276,000. A significant portion of these funds will be replenished as several ongoing capital projects conclude and surplus is rolled into this account.
Another important capital project, the space addition or renovation for the Youth Services Bureau in the amount of $250,000, was also removed from the General Fund budget, but will be fully funded through a combination of Community Development Block Grant proceeds and Capital Improvement Unallocated Reserve. The majority understands the space restrictions at the current Youth Services Bureau and we are dedicated to permanently solving this problem. I believe that we are very close to that solution and that this Board, in a bipartisan manner, can do something very positive for Manchester’s youth.
In the Fire and Police Department budgets, we reduced the number of new vehicles being purchased. We also reduced the amount of new equipment being purchased in other department budgets. We didn’t eliminate all new vehicles and equipment purchases, but we controlled this number in recognition of the economic times that we are in. We asked ourselves: How many taxpayers are buying new vehicles this year?
We also decided not to replace a patio at Cheney Hall this year. Again, we asked ourselves: How many homeowners are replacing their patio this year?
The budgets adopted tonight for the enterprise funds for the Fire Department, Water Department, Sewer Department, Sanitation Department and Information Systems closely follow the General Manager’s recommended budgets with some adjustments in vehicles and equipment purchased and levels of contingency maintained. The tax levy increase associated with the Fire Department is also less than 3%.
The Majority Budget factored an additional $250,000 in revenue for Medicare part D reimbursements obtained by the Board of Education. This revenue had not been factored into prior budgets and is based upon a rate of reimbursements being collected in the current fiscal year.
The Majority Budget uses $350,000 of surplus generated from the current budget year to boost the Town’s liability self insurance fund known as MSIP. In the coming fiscal year, we should not only continue to examine our level of funding for this area of the budget, but also examine the fund’s administration and the insurance products that the fund purchases as we did recently with our medical self insurance fund.
The Board of Directors is authorizing the General Manager to provide a 3% salary increase for unaffiliated employees who earn less that $50,000 effective July 1, 2008. This group of employees would be scheduled for a merit review on January 1, 2009 in the amount of 0% to ½%. All other unaffiliated employees would be eligible for a merit increase between 0% and 4% effective July 1, 2008. The General Manager has the discretion to provide up to an additional 2% in cases where salary compression has become a concern. The minimum and maximum ranges of the unaffiliated salary schedule would increase by 3% effective July 1, 2008.
As we reach the end of this budget adoption process, I would like to express my gratitude to General Manager Scott Shanley and acknowledge the tremendous contributions of our Budget Officer, Julian Freund, and our Budget Analyst, Brian Wolverton. I would also like to thank Ginger MacHattie, Donna Huot and Colleen Monzu for their ongoing support of this Board. I thank the Town staff and department heads who worked very hard to keep their budgets within level funding. Finally, I thank the all the members of this Board of Directors who gave up many nights and weekends of their time to attend budget workshops, develop a better understanding of Town finances and develop a thoughtful and comprehensive budget for the coming fiscal year. It is a tremendous honor to serve as a member of Manchester on the Board of Directors and be a part of this budget adoption process. On behalf of the Manchester Board of Directors, I wish the citizens of Manchester a happy, healthy and prosperous year.
Sincerely,
Louis A. Spadaccini
Mayor
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